Choosing your legal shape: DBA, LLC, or nonprofit

Before your club can open a bank account, sign a field permit, or buy insurance in its own name, it needs a legal shape. There are three common ones, and they are very different animals.

Facts checked: 2026-08-30

The DBA. A DBA — a "fictitious business name" — is the lightest and the most misunderstood. It is filed with your county clerk, not the state, and all it does is let you operate under a name that isn't your own legal name. It creates no company. If the club is just you with a DBA, you are personally on the hook for everything the club does. Counties set their own filing fees and deadlines, so check your own county clerk's page — linked below. One more thing people mix up constantly: a DBA is not a business license. Those are separate, and our licenses guide covers the second one.

The LLC. An LLC is a real company, formed by filing Articles of Organization (Form LLC-1) with the California Secretary of State for $70. It generally shields the owners' personal assets from the club's debts. The costs that follow are the part people miss: a Statement of Information ($20) within 90 days and every two years after, and — the big one — California's $800 annual LLC tax, owed every year the LLC exists, whether or not it made a dollar, until you formally cancel it. The Franchise Tax Board says this plainly on its own page.

The nonprofit. A nonprofit corporation is what most serious youth sports clubs become, and it is a two-step process that trips people up. Step one is incorporating with the Secretary of State — and here is the catch the state's own tax agency spells out: a nonprofit corporation that has not yet received tax-exempt status is taxed like any for-profit company, minimum franchise tax and all. Step two is exemption: federally, IRS Form 1023-EZ ($275 for smaller organizations that qualify) or the full Form 1023 ($600); then California's FTB Form 3500A with your IRS letter attached — the state stopped charging for that application in 2021. Once exempt, you file a short annual information return (Form 199 or the 199N postcard, depending on your receipts).

Which to choose. Why do clubs go through all that? Beyond donations being deductible: at least one major youth-sports insurance program sells Directors & Officers coverage — the policy that protects your board members' personal assets — only to not-for-profit organizations. Your legal shape quietly decides what insurance you're even allowed to buy.

Whatever shape you pick, get an EIN from the IRS. It's free, it's issued online in minutes, and you'll need it for the bank, for hiring, and for the exemption application. Anyone charging you for an EIN is charging you for a free thing.